Economics 

Vocabulary 

for 

S^cac^ers 

anb 

Sludents 



E( ONOMICS VOCABULARY 



FOR 



TEA0HE118 AND STUDENTS. 



BY 

Veil A, Teoter, 

Superintendent of Public Schools, 
Richland, Iowa. 






COPYRIGHT 1922, 
BY VERL A. TEETER. 



MAY -8 '22 

2)014675015 



*vvo 



\ 



cj "VOCABULARY IN ECONOMICS" 



'^ 



ABSOLUTE FREE TRADE, exists when no duties are imposed eith- 
er on imports or exports. 



ABSOLTUE UTILITY, is utility in general, without regard to the 
quantity of the commodity, and is measured by the importance 
C^ of the want which is satisfied, 

ACCIDENTAL CONSUMPTION, is when wealth is destroyed by fire, 
railway collisions, etc. 

AD VALOREM DUTY' is a certain percent levied on the appraised 
market value of merchandise in the country from which it is 
imported. 

AGENTS OF PRODUCTION, are land, labor and capital. Land and 
labor are the primary essential agents; capital is the secondary 
agent. These agents are sometimes called the factors of 
production. 

ANARCHISM, is a theory that would do away with government en- 
tirely leavinu- all activity to individuals acting voluntarily. In 
some 'respects anarchism is the diametric opposite of socialism; 
in other respects it is somewhat similar to socialism. Its prin- 
ciples arc somewhat represented in this country by the Industrial 
Workers of the World. Pierre Joseph Proudhon was the founder 
of Anarchism. 

ARBITRATION, is the settlement of a dispute by a third party, usu- 
ally called an arbitrator or an umpire. 

ARBITRATtt)l«. i^inds of: (1) Conciliation; (2) Voluntary Arbitra- 
tion: (3) Compulsory Arbitration. 

AUTONOMOUS or INDEPENDENT PRODUCERS, are those under- 
t-ikers who do not hire help; they do not work for wages, but 
furnisl^' their own capital and sell their product honing to make 
a profit. 

BANK is a corporation organized for the purpose of receiving, keep- 
ing and lending money and making possible the various forms 
of credit. 



BANKS, Kind of: (1) Commercial; (2) Savings: (3) National; 
(4) State; (5) Private; (6) Reserve. 

BARTER, is the simple excluinge of one commodity for aiiotlier. 

BARTER, Difficulties of: (1) The double coincidence of wants and 
possessions; (2) The awkardness of making change; (3) The 
common denominator of values. 

BIMETALLISM, is the legal use of both gold and silver at a fixed 
ratioijT to each other. 

BLACKLIST, is a counter weapon used in the hands of the employ- 
er. In this case the employer refuses to hire certain employees 
whose names are included in the li.?t of those held to be unde- 
sirable. 

BOLSHEVISM, is a term used to describe the doctrine of the Bol- 
sheviks (The name of a radical party in Russia.) The underly- 
ing idea of their system is that the state is all powerful and 
that all the essential forms of industry shall bo controlled and 
regulated by it. The government is declared to be in the hands 
of those whom they call the "workers", and that means cliief- 
ly the manual laborers inthe towns, who, excep*: for the peas- 
ants, are in the majority in Russia. People Avho employ others, 
or who live by income which they do not earn iiave no pirt in 
the government. Authority in this system is exercised through 
Soviets. The Bolsheviki put themsolves in power by a i-ule of 
blood and iron. Lenin, is the Bolsheviki lawgiver, the framer of 
the Bolshevik decrees and the author of :he Bolshevik consti- 
tution. 

BOND, i- a secured obligation, promising to nay for value rei 
cei\ed, a sum of money at a certain time '/n/n inleie. t, payable 
at certain intervals and at a fixed rate. 

BOND?, Kind of: (1) Registered; (2) Coupon. 

BOYCOTT, is a combination to suspend dealing with another party 
and to persuade or coerce others to suspend dealings in order 
to force this party to comply with some demand, or to punish 
him for non compliance in the past. 



BOYCOTT, Kinds of: The simplest form of boycott is that in which 
a group of persons agree to have no dealing with some oth :r 
party against wliom they have a grievance. A more comp'ey. 
a'ld common form is one involving third parties who are not 
directly int -rested. The third form of boycott is the "unfair 
jisf or "we don't patronize list.' In this the labor periodical 
actually pulishes the names of firms that do not provide fair 
conditions for their employees and thus urges the public not to 
purchase their goods. The fourth, form of boycott is negative 
in character and is known as the "fair list' or 'whitP list' . In 
this a label is placed on goods made by union men in union 
shops. Members of the union and others are urged to purchase 
only thbse goods which bear the union label. 

BRASSAGE, is the actual cost of coinage. 

BY-PRODUCTS, are the wastes of industry, which by special pro- 
cess are converted into economic goods. Perhaps the best known 
utilization of by products has come within the development of 
the cotton seed oil industry. In 1860 cotton seed was garbage; 
ill 1870. fertilizer; in 1880, cattle food; in 1890, table food. 

CAPITAL, is wealth used for the production of more wealth. 1< 
any kind of ealth, aside from land, which a man uses in his 
business for the purpose of getting an income; is any product ol 
past labor used in further production. Capital is accumulated 
only through abstinence; meaning that we choose w alth cre- 
ating goods instead of pleasure creating goods. 

CAPITAL, Kinds of: (1) Fixed: (2) Circulating; (3) Free; (4) 

Soecialized. 
CAPITAL Steps necessary to create: ()) Income must be above 

line of bare subsistence. (2) Income must exceed outgo. (3) 

The surplus must be invested. 

CAPTAINS OF INDUSTRY, are the men who have shown them- 
selves great organizers and managers of business enterprises. 
They may b. and usually are independent producers, but thcv 
nlso frequently give their services to a great corporation, ... 
which thev are usually interested, and receive a salary. 



CIRCULATING CAPITAL, is the capital wliich is intended to be! 
used but once, and in using is either destroyed or is changedi 
into other forms of capital. 

Cn'lLIZATION, is the process of discovering new wants and means 
to satisfy them. Material civilization consists largely in want- 
ing many things and learning how to use them. Moral civil- 
ization consists in perfecting the duties and enlarging the cir- 
cle of brotherhood. ff 

CLEARING HOUSE, is essentially a banker's bank, where banks 
make their payments and collect their obligations from one 
another. 

CLOSED SHOP, is simply nn understanding that only union members 
\vi;] be employed in the establishment. 

COINS, are stamped and certified. pieces of metal. 

COINS, Kinds of: ()) Standard. (2) Subsidary. (3) Token. 

COLLECTIVE BARGAINING, means that th^ individual relies upon 
the union rather than upon himself in the matter of adjusting 
wages, hours and conditions of labor with employer. The 
Collective bargaining tends to level t e general level of wages 
and a'so tends to establish a minimum wag \ There is no com- 
petition among the wage earners and they are not permitted 
to bid as the sweat shop districts. 

COLLECTIVEISM, is a name which many socialists of recent years 

have favored to designate their program. 
COMFORTS, include everything which, tho'igh not absolutely nec- 
essary for health and strength, can hardly be dispensed with in any 
socitey wlere life is really worth living. Cushions or uphbls* 
tcred furniture, spring mattresses, etc, can hardly be called ab- 
solute necessaries, and yet they would be considered almost 
indispensable by the average family. 

COMMON STOCK, is the kind most usually issued by a corporation 
and carries no guarantee of a specified dividend. 

COMMUNISM, is a type of social organization in which all wealth 
including both producers goods and consumers goods, is owned 



and oontrollp.i by ihe community. It differs fron> Socialism 
ill that the latter proposes that the community sliall own and 
operate only producers' goods, leaving the consumers' goods 
to be owned and enjoyed by individuals.' Communism has nev- 
er been tried on a large scale, but there has been manv small 
experiments. It has been advocated by many philosphers, both 
ancient and modern. Many pictures have been drawn of ideal so- 
cieties in which communism was the outstanding feature, such 
as: Plato in his "Republic" Sir Thomas Moore in his 
"Utopia"; Francis Bacon in his new 'Atlantis'; Tommaso Com- 
panello, in the 'City of the Sun". In more recent times we 
have such books as "News From Nowhere" by William Morris 
'The Co-operative Commonwealth in its Outlines", by Lauruicc 
Gronlund; and "Looking Backward" by Edward Bellamy. 

COMPETITION, is the effort of individuals to produce and exchange 
goods on terms most advantageous to themselves. 

COMl'LEX or SUCCESSIVE DIVISION OF LABOR, exists when there 
is a splitting up of the several operations all belonging to one 
one stage of production; as in making shoes, one sews leather, 
one stitches it, one puts on heels, another soles, etc. 

COMPOSITE DEMAND, exists when one thing is wanted for many 
purposes; as, corn is wanted for bread, stock feeding, etc. 

COOPERATION, is consciously working aogether for a common cn-l. 
Its chiefs successes have been achieved in merchandizing: 
that is in buying rnd selling. 

CONCILIATIOxN, is a method for settling la,bor di^^putes. If tho 
parties cannot agr.e, a third party is chosen (conciliator) and 
. he tries to bring the parties to mutual understanding or agree- 
ment. It implies persuasion, not force. It means investigation, 
not award. 

CONSUMERS, are those who use goods. 



CONSUMERS, Classification of: (1) Productive, those giving ma- 
terial service and personal service, (2) Unproductive or inde- 
pendent, such as defectives and parasites. 



CONSUMERS GOODS, are those goods that satisfy desires directly. 

CONSUMERS GOODS, Kinds of: ()) Necessaries. (2) Comforts. (3) 
Decencies. (4) Luxuries. 

CONSUMPTION, includes all processes by which wealth is destroyed; 
is the direct satisfaction of human wants by the enjoyment of 
the utilities in. goods; is the end and means of production. 

f. 

CONSUMPTION, Kinds of: (I) Productive. (2) Non-Productive. 

CONSUMPTION GOODS, are those goods which are used for the 
enjoyment wj have in using ; e. g., a pleasure boat, a pair ot' 
skates. 

CONTUMORANEOUS or SIMPLE DIVISION OF LABOR, exists when 
the workmen carries through the whole of one stage of pro- 
duction, as a tailor, carpenter, etc. 

CORPORATION , is an association of individuals, recognized under 
th-^ law as a single artificial person. 

CORPORATION, Advantages of: (1) Limitation of liability. (2) 
Large scale business. (3) Ability to secure capital. (4) Effi- 
ciency in management. (.^) Permancy and stability. (6) Facil- 
ity of iiniisfer ol ON^nership. 

COUNTERFEITING, is t'.c making or passing of false coins or pa- 
per money 

COUPON BONDS, is a bond that has interest coupons attt(!ned. The 
coupon are payable to bearer, and are dated at regular interviils. 

CREDIT, is a transfer of goods for a promised equivalent is the 
power to command present wealth or services in exchange fo • 
some asurance of a future payment or return; is protracted 
exchange. 

CREDIT, is derived from the I^atin word credo, meaning I believe 

or confidence. 

CREDIT, Kinds of: (1) Book credit. (2) Notes. (3) Checks. (4) 
Bills of Exchange. (r>) Banking operations. 



CREDIT, Advantages of: (1) Economizes the use of precious metals. 
(2) Collects capital. (3) Allows capital to be used through\ 
more productive hands. (4) Is convenient. (5) It makes a 
long distance trade possible. 

CREDIT, Disadvantages of: (1) Overstrained credit results in com- 
mercial crises and panics. (2) It promotes indebtedness on the 
part of the poor. (3) Leads to extravegance. (4) Allows to 
much stock watering and speculation. 

CRISIS, Kinds of: (1) Industrial. (2) Financial. 

CRISIS, Theories of: See Jevons Sun Spot Theory. 

CURRENCY, is the proper term for money in the popular use of the 
word. 

DECENCIES, are those articles of consumption which the habits 
or customs of one's neighborhood or one's class prescribes, and 
Avithout which the individual or the family would feel that 
it could scarcely maintain its position of respectability. 

DEFECTIVES, arc unproductive consumers, who are physically or 
mentally unable to earn their own living; such as infants, in- 
sane, the aged, etc. 

DEFERRED PAYMENTS, are those which are not required to be 
paid at the time of the exchange, but are postponed until some 
future time. 

DEMAND, is an effective desire; that is not only a desire for al 
certain article, but the ability to gratify the desire. 

DEMAND, Kinds of: (1) Composite. (2) Joint. 

DEMAND, Kinds of: (1) Elastic. (2) Inelastic. . 

DEMONITIZATION, is the discontinuance by government of the 
use of coin and its official withdrawal from circulation. 

DEPENDENTS, are members of socitey who secure a living with- 
outt production, by enjoying the fruits of other people's labor 
and giving no equivalent in exchange* 



DEPEI^DENTS, Classification of: (1) Defective?. (2) Parasite?. 

DIMINISHING RETURNS, law of: in the cultivation of any tract 
of land a point is sure to be reached when the proportional 
returns of labor and capital begin to fall off. This law ofl 
diminishing returns has been called the great law of agri-» 
cultural production. This same law applie to mines. 

DIMINISHING UTILITY, Law of: Successive doses of the same 
commodity yields diminishing utility; is that as identical un- 
its of a good are consumed the satisfaction derived from any 
unit is less than the satisfaction derived from the preceding 
one. 

DIRECT TAXES, are those taxes laid upon parties who are intended 
to bear the sacrifices. 

DISTRIBUTION, is the division of wealth among those who had a 
share in producing it. 

DIVISION OF LABOR, is a system by which an industry is separa- 
ted into two parts or processes which are assigned to different 
workingmen or groups of workmen; it is giving to each group 
of workmen some particular part of work and letting him give 
his whole time and strength at it; it is but a social form of co- 
operation for the larger good of each and all. 

DIVISION OF LABOR, Stages of: (1) Simple or Contempora- 
neous. (2) Complex or Successsive. 

DIVISION OF LABOR. Advantages of: (1) Development of dexter- 
ity. (2) Saving of time in apprenticeship. (.3) Saving of time 
in changing work. (4) Adaption of labor to individual fitness. 
(5) encouragement of inventions. (6) Increases the amount of goods 
(7) Makes better quality of goods. (8)Lowers the price of goods. 
(9) Makes shorter hours and more time for recreation. 

DIVISION OF LABOR, Disadvantages of: (1) Work more monoton- 
ous and fatiguing. (2) Gives employment to women and chil- 
dren. (3) Makes men narrow and ineffcient in any other line of 
work than that in which they are employed. (4) Gives rise 
of dependence of man upon man. (5) Often deprives men of 
their employment. 



DOUBLE TAXATION !. taxing an Individual or different individuals 
twice for the same thing, e. g. land tax and a mortgage on t*ip 
same land. 

DUTIES OK CUSTOMS, are taxes laid on goods imported from for- 
eign lands. 

DUTIES, kinds of: (1) Ad valorem. (2) Specific. 

ECONOMICS, is that science which has to do with the wealth 
getting and wealth using activities of man; is the science of 
the laws of production and distrihution of wealth of the na- 
tion; Is the study of the dealings of men with one another 
which relates to earning a living, 

FX^ONOMIC GOODS, are goods which hecause of their scarcity com- 
mand goods in exchange; such as food and clothing. 



nan in 



ECONOMIC HISTORY, is the story of the developement of m 

his want satisfying activities, the story of man's discovery of 
new wants and how to satisfy them 

ECONOMIC HISTORY, Stages of: (1) Hunting and fishing sta^e 
illustrated by the life of the American Indians; (2) the nas- 
toral or herding stage, illustrated by the life of Aibraham,^ Is- 
aac and Jacob, and much of the Oriental life; (.3) The agri- 
cultural stage, illustrated by the farm life of' the majoritv of 
the English people before the fourteenth century; (4) The 
manufacture or commerce stage, including gild and domestic 
periods of English life from 1150 to 1769; (The industrial or 
factory period),- characterized by the application of steam as a 
motive power and the massing of employees in great mills and 
• factories. It began about 1769; (6) The trust stage, character- 
ized by the combination of small concerns into great syndicates, 
and the attempt to establish vast monopolies. The industrial 
life in the U. S. during the last century, illustrates this stage. 

ECONOMIC MONEY, must have a market value as a commoditv, 
equal to its face value as coin, and it must perform all the 
functions of money. 

EXX)NOMIC INTEREST, is actual return to capital on account of 
Us vaule creating power; is that which the owner receives in re- 



turn for capital which he owns and which he uses, or has in- 
vested in his own business. 

ECONOMIC RIGHTS, are those which belong to man in connncction 
with satisfying his material wants, or getting a living. These 
rights are limited by the rights of other men and the good 
of society. 

ECONOMIC WANTS, are those whose gratification commands a price; 
are those which are satisfied by things which are objects of 
exchange. 

EFFECTIVE. (FINAL or MARGINAL) UTILITY, is utility with 
special regard to the quantity of the commodity and the pres- 
ent needs of the individual. It is measured by the lowest wants 
satisfied by the available goods. 

EFFICIENCY OF LABOR, varies with the individual, and for the 
following reasons: (1) Heredity; (2) Food; (3) Sanitary sur- 
roundings; (4) Intelligence; (5) Hopefulness. 

ELASTIC AND INELASTIC DEMAND, demand may be elastic or 
or inelastic, that is the amount demanded may change readily 
or slowly with the change of price. The demand for necessar- 
ies is inelastic and the demand for luxuries elastic. 

EMBARGO, is a duty on goods sent out of this country. 

ENGEL'S LAW, shows that as the income of a family increases; (1) 
the percent for the expendture of of food decreases; (2) The per 
cent of the expenditure or clothes remains approximately the 
same- (3) The expenditure for rent, fuel, and light is variable; 
(4) the percent of expenditure for education, recreation, etc.. 
Increases. 

ENTREPRENEURS, are men who undertake to supply the needs of 
tl>e public and sell their products with the hope of making a 
profit Thev furnish the capital and may or may not hire la- 
borers. They are also called undertakers and proprietors. 

EXCHANGE, is the double transfer of goods; it is the transfer of, 
ownership for a consideration; it is trade. 



EXCISE TAX, is an inland tax on commodities of liome production 
or consumption. 

EXCISE TAX (INTERNAL REVENUE TAX), is a tax laid upon ar- 
ticles manufactured in cur O'Wn country, such as tobacco. 

EXTERNAL GOODS (ojDjective goods) comprise all of man's environ- 
ment that has utility; c. g. houses, cattle, air. 

FAIR PRICE, the current r.iarket rate is what people usually have 
in mind when they speak of a fair price. 

FEDERAL FARM LOAN SYSTEM, was inaugurated in 1916. The 
general organization of tliis system resem(bled that of the Federal 
Reserve System. It is nr^.sided over by a central body knoAvn 
as the Federal Farm Loan Board. The country was divided 
into tAvelve districts, ad in each district a city was selected 
as a headquartrs for tlie Farm Land Bank. The Farm 
Loan Bank Avas to operate throughout its ov.n district in the 
( rganizaUon ,)f local F^rm Loan Associations. 

FEDERAL RESERVE SYST::M. Under this act of 1913, there was 
created under the Treaur ry Department of the United States, 
a Federal Reserve Board consisting of five members, besides the 
Srcrctary of the Treasury and the Comptroller of Currency. 
This Board v*^as charged with the general administration of the 
national banking systcr.i. The country was then divided into 
twelve districts, and within each district a city v/as selected 
to be called a Federa' Reserve City. The cities chosen were 
Boston, New York, Phil delphia, Cleveland, Richmond, Atlan- 
ta, Chicago, St. Louis, Minneapolis], Kannsas City, Dallas and 
San Francisco. This law required every National Bank to be- 
come a member of its regional bank and permitted state 
banks to become mem5)::rs providing they carried on their bus- 
iness according to cert, in specified requirem.cnts laid down in 
the Reserve Law. 

FIAT MONEY, is that fon.i of money issued Avithout backing. 

FINAL CONSUMPTION, is the use of goods for the satisfaction wo 
find in using them; e. g., driving for pleasure, eating fruit. 

FINANCIAL CRISIS, is an occasion when the money market be- 



fome?^ suddenly demoraliz'd, confidence di='appear-'^, and credit 
shrinks 

FIXED CAPITAL, is that kind of capital wliicli is intended to b« 
used more than once, as machinery, railroad trains, etc. 

FORMS OF CAPITAL, are subsistence, tools and materials. 

FORM UTILITY, exists when the article changes its form and may 
h? converted into a finished product ready for man's use, 

FREE CAPITAL, is a ca])ital whicii serves a variety of uses, such 
as coal. 

FREE COMPETITION, Is such competition as is not subjected to 
any unfair restriction or interference, It is sometimes called 
perfect competition. 

FREE GOODS, are goods which on accoilnt of their abundance com- 
mand no price.; e. g. air sunshine. 

FREE TRADE, (in common parlance) is the policy of levying du- 
ties for revenue only. 



GENETIC INDUSTRIES, are those in v/hich men make conscious 
and systematic efforts to direct the biological processes of re- 
production so as to increase the supply of desirable plants and 
animals. 

GENETIC INDUSTRIES, kinds of: (1) Agriculture (plant and an- 
imal breeding), (2) Poresti-y. (3) Fish culture. 

GOODS, comprises all things thnt have utility. 

GOODS, Kinds of: (1) Economic. (2) Free. 

GRADUATED TAX, is one whose rate of taxation increases as the 
value of the property to be taxed increases. Our national in- 
come and inhei'itance taxes are based on tliis principle. 



GRATUITUOUS COINAGE, is a f r. e coinage, that is no charge.J 
are made. 



GRBSHAM'S LAW, is that bad iiionej' drives out good money; cheap-' 
er money drives out the dearer money. 

HORIZONTAL MANAGEMENT, is a union under single manage- 
ment of a number of enletrprises of the same sort. 

INCOME TAX, a tax levied on thet income of citizens. 

INDIRECT TAXES, are those whose burden is generally borne by 
other persons than tho. e from whom the tax is collected. 

INDUSTRIAL DEPRESSION, is a general slowing down of product- 
ion because of an inability to sell goods or to get satisfactory 
prices for them. Disproportionate production and overspecula- 
tion are usually the cause of these industrial depressions. 

INHERITANCE TAX, is a t \x collected on estates as they pass in- 
to the possession of h'Mrs. This tax almost always bears a 
progressive rate. 

INTEREST, is the reward ra'd for the use of money; is the pricei 
paid for the use of capital; is the capitalist's share of the 
product. 

INTEREST, Law of: Inter st is determined by the productivity of 
capital in the hands of the marginal investor. 

INTEREST, Kinds of: (1) Loan. (2) Economic. 



INTEREST, Theories of: (1) Demand and Supply theory; (2) 
Productivety Theory; (3) Abstinence Theory; (4) Austrian 
Theory. 

INTERNAL GOODS, (Subjective goods) comprise all desireable parts 
faculties, conditions, an ] (lualities of human bein^rs. 

INTRINSIC VALUE, is the qualities of goods that makes them de- 
sirable, and by quality we mean their capacity for service or 
pleasure, and this makes them desirable and hence valuable. 
The intrinsic value of a hat is simply hat service or hat satis- 
faction. The intrinsic value of money is its exchange value. 



The term is used in respect to money more than In any other 
way. 

JEVON'S SUNSPOT THEORY, is that the observed recurrence of sua 
spots every ten or eleven y^ars explains the recurrence of cri- 
ses. Jevon mnintained that the sunspots indicated variation 
in tlie heat from the sun; this affected vegetation and crops on 
the eartli, whicli in turn affected the course of industry. 

LABOR, is human exertion directed toward the production of wealth; 
is human exertion of mind and body undergone with the object 
of creating utilities: is liuman effort voluntarily put forth for 
the production of goods, 

LABOR, Kinds of: (1) Productive. (2) Non productive. 

LABOR ORGANIZATIONS, are a continuous association of wage earn- 
ers for the purpose of maintaining or improving the conditions 
of their employment. 

LABOR ORCxANIZATIONS, Kinds ol: (1) Labor union. (2) Trade 
union. (3) Industrial union. 

LABOR UNION, is a type of organization which attempts to organ- 
ize all its laborers, regardless of their trade or occupation. The 
Knights of Labor had an organization of this type, and lately 
the Industrial Workers of the World have attempted a similar 
type of organization. 

LABOR UNIONS, Advantages of: (1) Simplifies business relations. 
(2) Americanizes and educates foreigners. (3) Elevates the 
character of thoir workmen. (4) Encourages thrift and econ- 
omy. (,^)) Affords protection for ti.e family in case of death, 
sickness and accidents. 

LABOR UNIONS, disadvantages of: (1) P'aces all men on a common 
level. (2) Individual advancement is prevented, (3) Individual 
liberty is restricted. (4) Lowers the standard of citizenship, 
(5) Is the source of discontent. 

LABORERS, Classified: (1) Wage earners. (2> Undertakers or 
(Entrepreneurs) (3) Independent or (Autonomous) producers. 



(4) Employers. 
LABORERS, Kinds of: (1) Productive. (2) Non productive. 

LAND, comprizes all natural resources which can be used in pro- 
duction and includes materials and forces; is any girt of nature 
which is used in the production of goods 



LAND, Services of: (I) Furnishes standing room; (2) contains 
those elements needed by plant life; (3) Contains products be- 
low its surface such as coal and iron. 

LAND, classification of: (1) Rent lands; (2) Free lands. 

LARGE SCALE MANAGEMENT, Kinds of: (1) Horizontal, (2) Ver- 
tical. 

LARGE SCALE PRODUCTION, advantages of: (1) Better opportu- 
ntiy for the use of machinery; (2) Less expense for office force 
accordingly; (3) More elaborate division of LiTjor is feasible; 
(4) Supplies can be bought cheaper; (.5) Disposal of output is 
less accordingly; (6) Better chance for experimenting with new 
devices and methods; (6) Advertising is more effective; (7) By- 
products can be utilized. 

LA SALLE'S IRON LAW, Wages tend to full to the level, of that- 
standard of living which just provides the necessities of life. 

LEGAL TENDER, is that which the law compels a creditor to re- 
ceive in payment of debts* 

LIBERALISM, is a program whereby industry shall be carried on 
in any way that seems to promise desireable results, preference 
being given to free and voluntary business arrangements, rather 
than compufsory. In short the li'beralist is willing to trust men 
with the power of free contract whereas the socialist relies main- 
ly in the government power of compulsion. The liberalist pro- 
gram permits the private ownership of capital, and receipt of 
interest as a private reward, on the ground that the accumula- 
tion of capital is productive service and is useful to society. 



LOAN INTEREST, is simply contract interest; it is the amount 
paid the lender by the borrower for the use of the capital. 

LOCK OUT, is the capitalist's way of striking. It consists of 
locking the doors of the factory and announcing that work will 
be discontinued until the laborers accept the terms offered by 
the employers. 

LUXURIES, are articles of consumption which are not required for 
the physical health and strength of the people for their physi- 
cal comfort, or by rule of society, but are wholly matters of 
individual indulgence.. 

MALTHUSIAN DOCTRINE. Dr. Malthus, an English clergyman, 
about the close of the 18th Century wrote a book claiming that 
population increased in geometric ratio while food increased 
only in arithmetical ratio. Therefore it was only a question of 
time when the world would be unable to sustain its population 
and men must starve. 

MALTHUS THEORY, Criticisms of: (1) His theory applies only to 
a stationary society, because in a progressive society human 
invention and food supply may far outstrip any increase in 
population; (2) His theory makes no allowance for the increa-ie 
in efficiency which may come with increased population, be- 
cause increase of population makes possible better co-operation. 

MATERIAL WEALTH, is that wealth which is transferable and 
for the enjoyment of which we are willing to undergo some 
sacrifice. 

MARGINAL UTILITY, is the utility of the last unit; is the lowest 
utility oi* a commodity. 

MINT PRICE OF GOLD, is the rate at which coin is given for bul- 
lion. 

MONEY, is a medium of exchange; is a thing which by common 
consent of the business community, is used as the basis of com- 
mercial obligations; is any material which people generally 
will accept as a convenience in making a trade. 

MONEY, Conceptions of; (1) Popular; (2) Legal; (3) Economic. 



MONEY, Desirable qualities in: (1) Commodity value; (2) Univer- 
sal acceptability; (8) Portabilrty; (4) Durability; (5) Hom- 
ogeneity; (6) Divisibility: (7) Stability invalue; (8) Cog- 
nizability. 

MONEY. Functions of: (1) Medium of exchange; (2) Measure of 
value; (Z) Means of deferred payments; (4) Storage of 

value. 

MONEY, Kinds of: (1) Coins; (a) gold; (b) silver; (c) nickel; 
(d) bronze. (2) paper; (a) gold certificates; (b) silver cat*-' ' 
tificates; (c) treasury notes; (d) U. S. notes; (e) National; 
bank notes; (f) Federal Reserve notes; (g) Federal Re^ervc^' ' 
Bank notes. 

MONOMETALLISM., is the term applied to the use of a single m.etnl 
as standard money. The U. S. has had the monetary gold stan- 
dard since 1900. . . 

MO?\OPOLIST, is a person or combination of persons (public ui- 
private) which has and uses the power of control of the mar- 
ket with regard to any commodity. 

MONOPOLY, is the exclusive control of the market with regard to 
any commodity. 

MONOPOLY, Kindfi, of: (I) Industrial: (2) Franchise: (.'^) Labor. 
(4) Public. 

MISER, a covetous man who denies himself the comforts of life to 
hoard up money. 

NECESSARIES, are goods which are required for the rnaintainance 
of physical health nnd str'Migth, not only of mature man, but 
also of his family. ,,; . 

NOMINAL WAGES, are wages expressed in money and vary with 
tb.e purchasing power of tmoney. ' i;!'; 

NORMAIj VALUE, is determined by the cost of production of that 
part of the needed supply produced at the greatest disadvan- 
tage. 

OBSTACLES TO PERFECT COMPETITION. H) Unjust govern^ 



ment interference; (2) combinations of employers; (3) Com- 
binations of employees; (4) Timidity; (5) Ignorance; (6) 
Custom; (7) Sentiment. 

OBJECTIVE VALUE, is the amount of potential energy in material 
goods and that power of exchange. ■ The objective value jf 
coal is the amount of power it creates througi its heating ca- 
pacity and also the amount of economic goods it will exchange 
for on the market. 

OCCUPATIONS, are ways of getting a living. 

OCCUPATIONS, Kinds of: (1) Productive. (2) Unproductive. 

OCCUPATIONS, Classification of: (1) Exlraction; (2) Transporta- 
tion. (.3) Transi'ormation; (4) Transfer of Trade, and (5) Per- 
. sonal service. 

OPEN SHOP, 'is one in which no discrimination is made in the empl®y- 
meat of union and non-miion men, 

PARTNERSHIP, is a simple combination of two or more individuals 
in the ownership and m.anagement of a given business in which 
each partner is fully responsible lor the acts and liabilities of 
the group. 

PARi^.SITES, are unproductive consumers who are able to earn their 
own living, but prefer to secure goods through the labor of 
others without giving and equivalent, e. g. thieves, gamblers, 
tramps. 

PERSONAL PROPERTY TAX. is a tax laid on movable and personal 
property 

PERSONAL SERVICES, comprise all vendible but nnparently imma- 
terial utilities resulting from lalior. 

PERSONAL SERVICE, considered as an occupation, is the render- 
ing of those utilities which are apparently immaterial and seems 
to be embodied in the purchaser, e. g. the occupation of a teacher 
singer, rnarber, etc. 

PICKETING, is \he stationing of a few strikers, called pickets, near 



fi factory or plant against which a strike is being concUioted, 
in order that they may intercept any strike breakers, and en- 
doavor to keep them from taking the places vacated by the 

(Strikers. Peaceful picketing has been theoretically considered legal 
but the courts have generally held that picketing implies i i- 
timidation and is therefore illegal. 

'/ 

POLL TAX, is a tax laid upon individuals as suc:i without regard 
to his wealth or property; is a head tax. 

POPULISM, is a program based on a theory ,)f monopoly. Their 
slogan is: "Let the nation own the trust." They believe in gov- 
ernment ownership and operation but think i^. should stop \\ith 
trusts and monopolies. The populist approves ( f interest if it is 
a reward of unmonopolized capital. 

P0TENTL4L DEMAND, i«i a desire or want. 

POTENTIAL UTILITY, is the unrealized but possible utility existing 
in things which are not wanted but liafble to come into demand 
by a cliange in the attitude of consum.ers. 

POTENTIAL WEALTH, comprises all unapproiated economic goods 
Most objects in nature are potential wealth. 

PREFERRED STOCK, is that kind of stock that carries with 
it a guaranty of a definite dividend. This kind of stock is often 
issued in times of emergency to provide working capital or to 
pay de1:>ts, 

PRICE, is the value of an article measured in terms of money; is 
the value of goods stated in money; is the economic measure 
' of utility. Price is not set by desires, but by demand, (effective 
demand.) 

PRODUCTION, is the development of utility; is the creation not jf 
things, but of utilities by the application of mans power to the 
physical universe. This power of man is labor.. 

PRODUCTION GOODS, are goods used to aid directly in thel pro , 

duct ion of more goods. 
PRODUCTIVE CONSUMPTION, is the use of goods to produce more 

goods; such ns the use oi' tools and materials to l)uild a house. 



PRODUCTIVE LABOR, is that kind of labor which yields a service 
or satisfies wants. 

PRODUCTIVE GOODS, are those goods, that satisfy our desires in- 
directly, 

PRODUCTIVE LABORER, is one who does what another person i.^ 
willing to pay; is one who brings forth utilities. 

PRODUCTIVE OCCUPATIONS, are those in which men produce 
the goods they enjoy, or their equivalents which they exchango 
for those they wish to enjoy. . 

t A 
PROFIT SHARING, is a scheme devised^ bw eiUftloyei"s/fo increase 

their output by giving the employees ^Tl'^jlterest/m the product. 

This plan ha.> been tried out by Hei^;^ F05i^and has been 

successful. ♦ 

y 

PROFITS, is a surplus over and above production; is that part ®:f 
the product which goes to the undertaker (entrepreneur) on ac- 
count of his business ability; Is the undertaker's share of the 
product; is the income of the independent business man whe 
receives neither stipulated wages, r&nt, nor interest. 

PROGRESSIVE TAX, See graduated tax. 

PROPORTIONAL TAX, is a tax that imposes a fixed rate, irrespective 
of the total amount of property or income of each tax payer. 

PROTECTION, is the policy of levying tariff duties for the purpose 
of restricting foreign trade in favor of home industries. 

PROTECTION, Arguments in favor of: (1) The balance of trade 
argument; (2) The home market argument; f.*^) The infant- 
industries argument; (4) The standard of living argument; (.G) 
The anti-dumping argument; (6) Military-supplies argument. 

PROTECTION, Arguments against: (1) Puts an artificial price on 
commodities; ((2) Fosters monopolies; (.3) Encourages unwise 
attempts to start industries that are not suited to the people or 
climate. (4) Isn't necessary in the U. S. (5) Is unconstitutional 

REAL ESTATE TAX, is a tax laid on real G.state. 



REAL WAGES, are oconomic wages, and menn the purchasing dow- 
er of a days wages; are wages reckoned in the commodities to 
be hought vrith wages. 

REGRESSIVE TAXES, are those taxes in which the rate increases 
as the amount of property or income decreases. 

RENT, is that part of the product which goes to the landlord, on 
account of tlie productiveness of the soil; is what is paid for 
the use of soil; is the normal return of land; is the money paid 
for natural resources. 

RENT, rises from two fundamental conditions of land: (1) That of 
fertility; (2) Thnt of position or location. 

REPRESENTIVE WEALTH, is proof, sign, or evidence, of ownership 
in real wealth, e. g. deeds, mortgages, etc. Strictly speaking it 
is hardly to be considered as wealth, but simply as representive 
wealth. 

REVENUE, is the general income of a state, derived from the an- 
nual taxes, excises, customs, etc. 

REVENUE, Kinds of: (1) Direct; (2) Derivative; (3) Anticipa- 
tory. 

SABOTAGE, is a strike on the job, that is, a strike without quit- 
ting work. It is a new w^eapon used by the L W. W. in its 
battles with employers. They disable the machinery or spoil 
the products. 

SCARCITY, is th.e insufficiency to satisfy desires; is the earmark 
of an economic good. 

SCAB, is a workman who works for lower wages than, or under 
conditions contrary to those prescribed by the trade union; al- 
so one who takes the place of a workman on a strike. 

SEIGNIORAGE, is the actual cost of coinage plus a commission. 

SERVICES, are utilities resulting from labor. 

SIMPLE DIVISION OF LABOR, See Contemporaneous Division jf 
of Labor. 



SINGLE TAX, is a policj' under which nil the public revenue is to 
be raised by a single tax on land values; land value in this 
case means the land itself irrespective of all improvements, such 
as ditching, fencing, the planting of treis and the erection of 
buildings. In short everything done on the land itself to im- 
prove the value of an estate is classed as an improvement and, 
under the single tax, would eb exempt from taxation. This leaves 
nothing except the location value and fertility to be taxed. 
The original advocates of the single tax were a group of French 
economists, called physic-rats. 



SOCIALISiVf, is a plan of iuusti'ial and political organization, by 
which all capital goods are owned and managed by society 
through government; is an industrial democracy established 
and controlled by the government; is coQrcive co-operation in 
production; is a program which calls for the socialization of the 
instruments of production. 



SOCIALISM, Terms closely related: Communism, Populism, Anarch- 
ism, Liberalism, Collcctiveism, Bolshevism. 

SOCIALISM, Characteristic elements of: (1) The common ownership 
of the means of production; (2) The common management of the 
means of production; (.3) The distri-bution of the products of 
industry by common authority. 

SOCIALISM, The weakness of: (1) would not insure equality; (2) 
Would affect individual initiative and energy; (3) Would be 
unable to apportion labor of all conceivable degrees among the 
laborers; (4) Would be unable to organize such industries as 
agriculture; (5) Offers no definite plan for the rapid transi- 
tion from individualism to socialism; (6) Underestimate the 
efficiency of the present system and individual responsibility. 



SOCIALIST is one who believes that the community, the public, 
or the government should own and operate the means of pro- 
duction, leaving to individuals the ownership of most articles 
of consumption. 

SOCIALISTS, Groups of: (l)Utopian; (2) Fabian; (3) Christain; 
(4) Marxian. 



SOCIALISTS, have five objectrons to our present eociety: (1) Ex- 
ploitation; (2) Wastefulness: (3) Evils of competition; (4) 
Lack of equal opportunity; (5) Growth of private monoplies. 

SPECIALIZED CAPITAL, is capital which serves but few uses, e. g. 
nut meg grate. 

SPECIFIC DUTY, is a specified amount levied on each article, as 
so much a yard or pound 

SPENDTHRIFT, an extravagant spender. 

STANDARD OF LIVING, is the minimum, in number and character, 
of the wants which a man insists on having satisfied; The stan- 
dard of living depends upon environment, class, income and 
individuality. 

STRIKE, is a concerted action whereby large bodies of workmen 
quit work at the same time. 

STOCK, is the name given to the capital of a corporation. 

STOCK, Kinds of: (1) Preferred. (2) Common. (.3) Watered. 

SUBSIDARY COINS, are coins of less denomination than the stan- 
dard coin. Fifty cent pieces; twenty-five c nt pieces and dimes 
are subsidiary coins. 

SUCCESSIVE DIVISION of LABOR, See complex Division of Labor. 

SUR TAX, i^ a pi-ogressive tax levied on incomes. 

SWEATING SYSTEM, is a term used to describe a condition of labor 
in which a maximum amount of work in a given time is per- 
formed for a minimum wage and in which ti;e ordinary rules of 
health and comfort are disregarded. 

SWEATING SYSTEM, Essential factors of: (1) Long hours; (2) 
Low wages; ('A) Working under unsanitary conditions. 

SWEATING SYSTEM, Conditions leading to: (1) A crowded popu- 



latioii in large cities; (2) High rent; (3) Contract work. 

SWEATING SYSTEM, Evils of: (1) Long hours; (2) Low wages; 
(3) Unsanitary conditions; (4) Spreading of disease; (5) 
Driving. (6) Subdivision of labor. 

SWEATER OR CONTRACTOR, is one who makes a special business 
of employing imigrants. The \best man fitted to ho a contractor 
or sweater, is the man who is well acquainted with his neigh- 
bors, who is able to speak the language of several classes of 
immigrants, who can easily pursuade his neighbors, or their 
wives and children to work for him, and in this way can obtain 
the cheapest help. He has no connection with business inter- 
ests, but acts as a go between for the manufacturers. 

TARIFF, is a schedule of dutie^ leviod by an act of cdngr'aFv^ on- 
goods brought into the country from abroad; on imports. 

TAX, is a payment, usually in money, exacted 'by the government for 
the purpose of carrying on public enterprises for the commo,"! 
good; is a compulsory payment to the government for which the 
government does not return to the individual payer a commod- 
ity or a service. , 

TAX, Kinds of: (1) Personal property tax; (2) Poll tax; (3) Real 
estate tax; (4) Income tax; (.5) Inheritance tax; (6) Single tax 

TAX, Classification of (1) Direct; (2) Indirect. 

TOKEN or MINOR COINS, are coins of smaller denomination than 
the subsidiary coins. They are made of inferior metal. The 
Nickel and five cent pieces are token coins. 

TRADE UNION, is an organization of men who v/ork at the same 
trade. The Brotherhood of Locomotive Engineers is an exam- 
ple of this kind' of organization. 

TRANSFER OR TRADE, is the business of buying and selling goods. 

TRANSPORTATION, is changing the form or arrangement of goods 
in such a way a~ to add to their utility or value, e. g. all 
forms of manufacture, painting, sculpture. 

TRANSPORTATION, is changing the location of goods is such a 
way as to give them additional utility or value, c. g. railroading, 



express ©r dray business. 

TRUST, is an organization of corporations (though it may include 
a few individual capitalists,) for the purpose of controlling the 
market. 

UNDERTAKERS, See Entrepreneurs. 

UNEARNED INCREEMENT, is that 'increase in the value of any- 
thing subject to a natural monopoly which is due, not to the 
expenditure of labor or skill by the proprietor, but to the gen- 
eral progress of society resulting in an increasfd demand for 
that thing. 

UNPRODUCTIVE LABORERS, are those who engage in mere .spec- 
ulation and do not produce utilities. Paupers, thieves and 
.swindlers are unproductive laborers as they are parasites, they 
contribute nothing, simply try to get things away from others, 
often they exert themselves but theiy activity is purely pre- 
datory, 

UNPRODUCTIVE OCCUPATIONS, are those in which men do not 
produce the equivalent of what they enjoy, but secure part or 
all of their utilities at the expense of others. 

USURY, is the charging of a higher rate of interest than that es- 
tablished by law. 

UTILITY, is anything that satisfies a desire; is the power to sat- 
isfy a human want. 

UTILITY. Kinds of: (1) Natural; (2) Form; (3) Time; (4) Place. 

VALUE, is the power which a commodity has to command other' 
commodities in exchange; is a term applied to different articles 
to represent their degree of d sirability; is the relation of ratio 
between one thing and anotl er; is the worth of a thing to the 
possessor. 

VALUE, Kinds of: (1) Subjective; (2) Objective; (3) Intrinsic. 

VALUE, Theories of: (1) Labor Theory; (2) Difficult of attainment 
theory; (3) Scarcity theory; (4) Utility theory. 



VALUE, has two meaning?: (1) Value in uso; > (2) Value in ex- 
change. 

VERTICAL COMBLNATION, is the uniting of successive stages of an 
industry under singlement management. The U.S. Steel Corpora- 
tion carries out this sort of combination on an enormous scale. 
This corporatiton owns vast mines of iron, coal and limestone. 
!ias its own railroads and steamships for transportation and 
makes its own furnaces. The American Sugar Refining Co., is 
another good example. 

VOLUNTARY ARBITRATION, ^s a system in which the emplo3'er and 
employees agree to settle their differences peacefully. Usually 
each side selects an equal num^oer of arbitrators and the arbi- 
trators themselves select another to avoid the possibility of a 
tie vote. Each side then presents its case, and the arbitrators 
give their decision. 

WAGES, is tl;at part of the product which goes to the laborer; if> 
tlie laborer's share of the i)roduct. Wages (strictly speaking) 
is the fixed amount guaranteed to the laborer by the employer 
in return for services perform.ed. 

WAGES, Kind^- of: (1) Money: (2) Real. 

WAGE EARNERS, are laborers employed at definite wages 
or salaries. They have no capital invested in the business, ex- 
cept occasionaly certain simple tools which they use in their 
work, e. .g. the laborer's shovel and pick. 

WASTED MAN POWER, (1) The idle; (2) The ineffectively em- 
ployed; (3) The harmfully employed. 

WATERED STOCK, is stock baned on no real value. The chief pur- 
pose of issuing V\'atered stock is to eon.eeal fi-om the public the 
true rate of profit earned by the company. 

WEALTH, comprises all material, economic goods, which have been 
appropriated by man; Is anything that satisfies a desire for the 
attainment of which we are willing to undergo some sacrifice, 
and which is exchangeable. 

WEALTH, C:':aracteristics of: (1) Utility; (2) Difficult of attain- 
ment; (3) Transferability. 



LIBRARY OF CONGRESS 



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